Inflation on the way: a slowdown is expected in August, but only slightly

After having known the inflation data for July, the highest in the last 20 years, with a variation of 7.4% which puts annual inflation at 71%, the question that arises is what will happen to prices in the coming months.

Broadly speaking, analysts estimate that the strong upward pressure will continue in August. Not just because dragging high inflation in July but due to the uncertainty that still looms over the course that Sergio Massa will impose on the Ministry of Economy. However, the data it should be lower than in July: around 6%.

For now, according to analysts from the consulting firm LCG, food and drink will already contribute two points to headline inflation in August. “In addition, increases have been authorized for some regulated services that will inevitably affect the final number of inflation: 40% in buses and trains in AMBA and the increase in prepaid”, they underline.

To this is added a bonus that will be paid to condominium managers, (which will be divided into monthly installments until February 2023) and will affect an increase in expenses of about 6%. In total these three questions would add another two additional points. “Now without the impact of seasonal factors and in an environment of” greater “stability than in July, our inflation projection for August stands at 6% per month,” the consultant said in a report.

To these rumors set to boost inflation this month, CEPA economist Hernán Letcher adds that the impact of health care costs, due to authorized increases in prepaid, is in the order of 11.34% bimonthly. And he stressed that in food and drink “macroeconomic instability (in particular linked to the scarcity of dollars) generates a scenario in which the big price makers consider a” fertile ground “for rebranding”.

When asked about the possible change in the price index (CPI), according to the analyst, “It should drop a little in August and maybe a little more in September”, opined.

Aldo Abram, of the Fundación Libertad y Progreso, thinks that, according to the database collected during the first week of the month, it is likely that August will increase by around 6% and that it will be a bit lower in September, ”he pointed out.

The ACM consultancy, for its part, adds that in the rest of the year “it will be Fundamental is the trust that the new management can generate. “which implies the achievement of the objectives of the agreement with the IMF. On the other hand, other relevant variables will be the interest rate and the official exchange rate.their analysts warned.

Meanwhile, in September, the impacts expected in the pocket will be linked to the water, electricity and gas rates, both in removing subsidies and in applying energy saving measures. And increases in education are also expected due to planned increases in private schools in the province of Buenos Aires, Letcher recalled.